Dr. Dre to Star In Apple’s First Scripted Video Series

The relationship between Apple and Dr. Dre appears to have evolved yet again.

The legendary rapper and music producer is reportedly executive producing and starring in a “semi-autobiographical” drama miniseries that would be Apple’s AAPL first original scripted series, according to The Hollywood Reporter, which cites anonymous sources. THR adds that Apple is paying to produce the six-episode series, which is called Vital Signs and will likely be released through the company’s Apple Music streaming platform.

Less than two years ago, Apple paid $3 billion to acquire Beats Electronics, the audio products and music streaming service co-founded by Dr. Dre (aka Andre Young) and music producer Jimmy Iovine, before integrating that company’s streaming technology into its own streaming platform, Apple Music, which launched last summer.

After making a bundle selling Beats to Apple, Dre reportedly took on a “senior role” at Apple and now hosts a radio show on Apple Music’s Beats 1 station. Last year, Dre also opted to initially release his first album in 16 years exclusively through iTunes and Apple Music. The album, called Compton, streamed 25 million times in its first week of release and went on to sell more than 500,000 copies, according to Billboard.

For Apple, Vital Signs would represent the tech giant’s first push into original video content—a move Apple had previously been rumored to be considering, and one that could establish the company as a rival to other streaming services that are putting out more and more original series and films. Amazon AMZN, Hulu, and Netflix NFLX have all emerged as competitors with traditional media outlets such as television networks and Hollywood movie studios, with the streaming services stockpiling original series and films by cutting deals with A-list talent and inspiring bidding wars for desirable content.

Meanwhile, THR also notes that it is still unclear whether or not Apple TV would be involved in distributing Dre’s series. The company launched its new set-top box last fall, but it has so far had trouble reaching deals with content providers to add their apps to the box’s lineup.

As for Dre, the rap legend has had a busy and successful past few years, going back to the Beats sale and the success of his latest album. And, last summer, the movie based on his time with the group N.W.A., Straight Outta Compton, was a major box office success, earning more than $200 million in worldwide ticket sales.

It’s possible the success of Straight Outta Compton convinced Apple it would be wise to invest in another project based on the rapper’s life. As THR reports, multiple sources say each episode of Vital Signs would focus on a different emotion as its theme while depicting Dre’s character experiencing that emotion. Actors Sam Rockwell and Mo McCrae are also reportedly cast in the series.

Dr. Dre, whose movie “Straight Outta Compton” earned $56.1 million in its opening, broke his silence on his past.

“Twenty-five years ago I was a young man drinking too much and in over my head with no real structure in my life. However, none of this is an excuse for what I did. I’ve been married for 19 years and every day I’m working to be a better man for my family, seeking guidance along the way. I’m doing everything I can so I never resemble that man again,” he said in the statement.

“I apologize to the women I’ve hurt. I deeply regret what I did and know that it has forever impacted all of our lives,” he added.

Apple, too, released a statement about its consultant. “Dre has apologized for the mistakes he’s made in the past and he’s said that he’s not the same person that he was 25 years ago,” it said. “We believe his sincerity and after working with him for a year and a half, we have every reason to believe that he has changed.”

The allegations against Dre have been no secret, but resurfaced recently when one of the women who accused him, Dee Barnes, wrote a column for Gawker about what was missing from the new biopic.

The Times spoke with Barnes and two other women who alleged Dr. Dre abused them physically. The article details their interviews, which can be found here.

3 reasons to invest in Apple now

Apple Inc. AAPL has had a tough couple of weeks. The company showed strong growth in the last quarter, but the oversized expectations of Wall Street, worries about future iPhone sales, a likely weakness in the Chinese market for U.S goods due to the country’s recent devaluation of its currency, and a tepid start for Apple Music, have all conspired to hammer the price of its stock. As of Tuesday, shares have fallen by almost 13% from its 52- week high of $134.54.

Yet there are still several factors working in Apple’s favor, and here I list three big ones to watch:

Force Touch

Apple’s new iPhone releases are always popular, but the one thing that virtually guarantees good sales is offering substantially new features. The iPhone 6 family, for example, offered much larger displays than previous models and a nifty fingerprint reader that enabled easy access from the lock screen. The device generated record-breaking sales for the company in the first few quarters of its release.

The iPhone 6S (or 7), which is expected to come out this fall, will reportedly have the Force Touch feature. Force Touch, currently available on the Apple Watch and MacBook Pro, enables the device to distinguish between light taps and longer ones, and assign different functions to them. That lets users access commonly used commands quickly and without having to go through multiple steps, which is very useful for everything from emails to maps.

Force Touch isn’t wildly radical, but its addition to the iPhone could provide a big boost to the phone’s utility and enhance the user experience. That will likely keep the iPhone relevant and fresh in a competitive marketplace, at least for another cycle, and that is what investors should focus on.

Dr. Dre

Dr. Dre’s first album in 16 years, Compton: A Soundtrack, has been a modest hit for Apple so far. The album was streamed 25 million times during its first week on Apple Music, grabbing the No. 2 spot on the Billboard charts. While the album’s performance was less impressive than that of some competitors, many of which benefit from Spotify’s larger user base, it’s worth remembering that it’s still early days for Apple Music. Dr. Dre’s album may just be the beginning of a long and successful run.

In addition, Straight Outta Compton, the Universal Pictures biopic chronicling the rise and fall of the rap group N.W.A., surpassed analyst expectations when it opened to $56.1 million over weekend. The movie is being propelled by great reviews, cultural relevance due to the current racial tensions in the U.S., and strong word of mouth. If the movie maintains its momentum, it should boost Dr. Dre’s album and generate free publicity for Apple Music.

Dr. Dre’s return to the spotlight could also help to propel sales of Beats headphones, which Apple acquired from the rap star in 2014. While Beats is a relatively small part of Apple’s business and Apple Music has basically cannibalized Beats Music, the headphones business has the potential to grow through cross promotion with Apple Music. The popularity of Dr. Dre’s new album could at least create a marketing splash for the Beats brand, which can only help.

Share Buybacks

Earlier this year, Apple increased its reserve for share buybacks through March 2017 to $200 billion and has been extremely active in this area. With healthy cash flows and a strong balance sheet, it’s only logical that the company would seek to increase value for its shareholders by boosting earnings per share. More importantly, it provides a valuable-cushioning mechanism for stock volatility and creates potential upside for the stock.

Last quarter, the company bought back 31 million of its own shares in the open market and 38 million more shares directly from big financial institutions, arguably breaking at least some of the fall from the dumping of shares by many large investors.

That’s good news for two reasons. First, the company’s willingness to repurchase its shares provides a necessary counterparty for wholesale sellers, who could otherwise crash the market with an excess of supply. Second, a decrease in the number of shares pushes up earnings per share for the remaining investors and at the same price-to-earnings ratio can give the stock a bump. If the market continues to value Apple at the same multiple, higher earnings would mean a higher price.

Of course, there are risks. Apple’s price-to-earnings ratio isn’t static; it depends on several factors, including weighted-average number of shares over time, the price at which buybacks are executed, and the market’s view of potential earnings in the future. Those earnings could be hurt by countless other factors, including a decline in the popularity of the iPhone (unlikely but possible), poor performance by new products like the Apple Watch, lack of traction by Apple Music to compete with Spotify, a commercial failure of Apple’s self-driving car project, prolonged softness in the Chinese market, and other things.

But in the meantime, at a pretty modest 12.7 times price-to-2015-earnings ratio, the stock seems like a good investment. Particularly if you consider that other technology companies like Facebook FB are trading at substantially higher levels.

S. Kumar is a tech and business commentator. He has worked in technology, media, and telecom investment banking. He does not own any shares of the companies mentioned in this article.

This is how many times Dr. Dre’s new album was streamed in its first week on Apple Music

Dr. Dre’s new album, “Compton: A Soundtrack,” was streamed 25 million times during its first week out on Apple AAPL Music and was downloaded nearly half a million times on iTunes, the New York Timesreports. The album was heavily promoted through Apple Music and iTunes and is exclusively available through those two media.

These numbers weren’t enough to get the album to the No. 1 spot in the U.S., where it received 11 million streams. This seems low compared to other hits this year, like Drake’s “If You’re Reading This It’s Too Late,” which was streamed 48 million times in just one week. While 11 million isn’t bad, “it’s not a spectacular number if you take in the number of Apple users that exist worldwide,” Russ Crupnick, analyst at MusicWatch, told the Times.

Other successful albums from this year greatly benefitted from the popularity of Spotify, which has about 75 million users. Apple Music, since being released on June 30, has had 11 million people sign up for its 90-day free trial.

Reactions to Apple Music have been mixed, and its impact on the music charts insignificant. There are already “really established services out there, like Pandora, Spotify, and Deezer, that people really like. It’s hard to penetrate the market as the second, third, fourth brand in, even if that brand is Apple,” Crupnick said.

We can expect to spot more marketing for Apple’s new service this month as they try to put the pressure on other music streaming services in their search for new subscribers.

‘Straight Outta Compton’ has whopping $56 million box office debut

Universal can officially add another hit to its long list of box office successes: “Straight Outta Compton” blew past initial predictions, ending the weekend with a whopping $56.1 million debut. The studio’s early predictions had “Compton” debuting in the mid to high-20s for the weekend, while others expected that it could make $40 million or more. But after “Compton” brought in an estimated $24.2 million on Friday, it was clear that the N.W.A. biopic was set to break some records.

“Compton” — which earned an A CinemaScore — scored the biggest opening ever for a musical biopic, with more than double what the previous record-holder, Walk the Line, opened to in 2005 ($22.3 million). “Compton” also earned the largest R-rated August opening in box office history.

With a reported budget of only $29 million, “Straight Outta Compton” is one more big success for Universal, which broke yet another box office record this weekend, becoming the fastest studio to cross $2 billion domestically. (The previous record-holder, Warner Bros., reached $2 billion in December 2009.) This has been a banner year for Universal, thanks to a diverse group of hits like “Furious 7,” “Jurassic World,” “Fifty Shades of Grey” and “Minions.”

This weekend’s other wide release, “The Man From U.N.C.L.E.,” only brought in an estimated $13.5 million, slightly under initial predictions. Guy Ritchie’s Cold War flick, which cost about $75 million to make and earned a B CinemaScore, opened in third place, just behind another spy story: “Mission: Impossible – Rogue Nation,” which made $17 million in its third weekend, only falling about 40 percent.

“Fantastic Four,” on the other hand, fell almost 70 percent in its second weekend, slipping to fourth place with an estimated $8 million. The superhero reboot has been troubled by bad reviews and negative buzz, only opening to $25.7 million last weekend, and so far, it’s only earned about $42 million domestically.

Joel Edgerton’s “The Gift” rounded out the top five with an estimated $6.5 million, only falling about 45 percent in its second weekend. STX Entertainment’s inaugural film has already grossed $23.6 million on a budget of $5 million.

At the specialty box office, Noah Baumbach’s comedy “Mistress America” opened to $94,000 in four theaters, giving it a solid $23,500 average per theater.

Audio equipment maker Monster sues Apple’s Beats over alleged fraud

(REUTERS) – Audio equipment maker Monster has sued Beats Electronics, owned by Apple, over alleged “fraud and deceit” in the way that Beats acquired control of the rights to the popular “Beats by Dr. Dre” headphones.

Under a partnership formed in 2008, Monster and Beats developed “Beats by Dr. Dre,” a line of colorful, high-end headphones that vie with the likes of Skullcandy and Bose.

According to the suit filed in San Mateo County Superior Court in California on Tuesday, Monster engineered the success of the headphones and was unfairly cut out before Beats was sold to Apple last year.

The complaint names Beats co-founders Jimmy Iovine and Dr. Dre as well as HTC America Holdings Inc, a unit of Taiwanese smartphone maker HTC Corp among others, as defendants.

Iovine is the co-founder of Interscope Records, a rap music pioneer that branched out to include acts like Lady Gaga and U2. Dr. Dre is a U.S. rapper and music producer.

The defendants fraudulently acquired Monster’s “Beats By Dr. Dre” product line including all development, engineering, manufacturing, marketing, distributing and retail rights, via a “sham” transaction with HTC, according to the complaint.

In 2011, HTC said it would buy a 51% stake in Beats for $309 million. Beats bought back half of HTC’s interest in the company soon after the transaction, the complaint said.

The complaint alleges the defendants used the change of control as an excuse to end its relationship with Monster in 2012, and that they had made millions off the work of Lee and Monster.

If you read one (more) thing about Apple buying Beats…

FORTUNE — Apple AAPL being what it is, Ben Thompson doesn’t talk much about the time he spent at Apple University, Steve Jobs’ top-secret graduate level training program on what makes Apple Apple.

But in Monday’s column — Why Apple Is Buying Beats — Thompson shares one lesson he was taught there: That Apple has grown so big, change is inevitable. In the future, managing and understanding that change will be paramount.

It’s in this context that Thomson would have you understand why Tim Cook might consider sharing management of Apple — the company Steve Jobs built — with Dr. Dre, Jimmy Iovine and Angela Ahrendts.

Thompson takes as a given that Apple needs to find a new way to grow, now that the one-time burst of spectacular growth created by the iPhone is leveling off.

“Apple Computer the name may have been retired in 2007,” he writes, “But Apple the personal computer company is 38 years old, and very well may have grown as big as it can grow.”

Is it doomed to simply slowly fade, delivering massive profits and interesting side projects along with a stagnant stock, much like Microsoft in the 2000s? It wouldn’t be a failure of Tim Cook, but more the natural order of such things.

Or are we witnessing a reinvention, into the sort of company that seeks to transcend computing, demoting technology to an essential ingredient of an aspirational brand that identifies its users as the truly with it? Is Apple becoming a fashion house?

Think about it: you have Jony Ive as all-up head of design, the equivalent of a Tom Ford or Donatella Versace. There is the hire of Angela Ahrendts – why would she leave the CEO position of Burberry for a Senior VP role? You have an iPhone framed as an experience, not a product. And now you acquire an accessory maker differentiated almost completely by its brand, not its inherent technical quality.

Thompson quotes Benedict Evans, who wrote that the rumored $3.2 billion purchase of Beats — a rumor not likely to be confirmed before Apple’s annual World Wide Developers Conference on June 2 — is like a Rorschach Blot:

“People who think Apple has lost its way see this as proof, while people who don’t assume there must be some other piece to the puzzle (TV? wearables?) that we can’t see to make this deal makes sense.”

Thompson’s analysis takes it to another level. He sees the deal more clearly than most Wall Street analysts.

But that didn’t stop Milunovich — or a half-dozen other sell-side Apple analysts — from going ahead and issuing strong opinions. Excerpts from the notes we’ve seen:

Steven Milunovich, UBS: Off-Beat acquisition. “The potential purchase of Beats Electronics for $3.2bn as discussed in the press could make sense given that (1) the purchase price is reasonable if Beats revenue is about $1.4bn with high margins; (2) Apple uses the music service to complement its mediocre success with iTunes Radio (see p3); and (3) headphones and their designers fit into the company’s wearable plans. Before formulating a strong opinion, it would be nice to hear Apple’s rationale… Apple has not promoted the brand of a company it has acquired, but it does have sub- brands: iPod, iPhone, iPad, Mac. People use the product name knowing Apple makes them. “Beats by Apple” isn’t all that different. The Beats brand is attractive in its appeal to young people and to African-Americans. Although product quality can be debated, the image can’t: “Other headphones look like medical equipment,” Iovine said. Apple gained lifetime users by getting Macs into schools, which Beats might do for music.” Rating: Buy. Price target: $625.

Brian White, Cantor Fitzgerald: Choosing Dr. Dre Over Drones? “With over 20 million tracks, no ads, high audio quality, and a very creative user interface, Beats Music markets itself as “the first music service that understands you.” Previously known as “Project Daisy,” Beats Music uses proprietary algorithms to offer consumers the appropriate music for their mood. As described by Beats Music, “Tell Beats Music where you are, what you’re feeling and who you’re with and we’ll serve you a unique stream of music that fits your situation perfectly.” We believe this feature could also have applications for movies and potentially other media. A subscription to Beats Music costs $9.99 per month and is available on iOS, Android, Windows Phone, and on the web.” Buy. $777.

Gene Munster, Piper Jaffray (Saturday): Rumored Beats Acquisition Likely To Bring Iovine On. “Apple’s motivation to acquire Beats for $3.2 billion (still unconfirmed) appears to be to bring Jimmy Iovine, a founder of Beats (and rumored to own 25% of the company) and long time record and film producer, to lead Apple’s content strategy. While gaining [Jimmy] Iovine is a justification for acquiring Beats, we believe that $3.2 billion is a steep price to bring on one high-level executive, given our stance that Beats doesn’t appear to offer anything to Apple aside from a brand – which is not a weakness of Apple’s. The good news may be that if the Beats deal does in fact happen, it may open the door for other larger scale acquisitions that could include something to improve Apple’s Internet services.” Overweight. $640.

Gene Munster, Piper Jaffray (Friday): Sounds like a bad idea. “We are struggling to see the rationale behind this move.Beats would of course bring a world class brand in music to Apple, but Apple already has a world class brand and has never acquired a brand for a brand’s sake (i.e., there are no non-Apple sub-brands under the company umbrella). Separately, we are not aware of any intellectual property within Beats that would drive the acquisition justification beyond the brand. We view a better use of capital for acquisitions to be in the internet services space given that is, in our view, Apple’s biggest weakness. This list would include Yelp, Twitter, Square and even Yahoo.” Overweight. $640.

Toni Sacconaghi, Bernstein: Apple and Beats: What’s the Deal? (Monday) “We struggle with the rationale for this deal on several fronts. While Beats headphones are undoubtedly very profitable on a gross margin basis, it is unclear whether the audio equipment and streaming technology relationships are privileged or hard to replicate. Further, it would seem that iTunes Radio could easily compete directly with Beats Music given the huge iOS/iTunes user base and Apple’s scale, and the fact that Beats Music was only introduced in January and is likely not large on a revenue basis. Finally, it is uncharacteristic of Apple to look do an acquisition this large and with a company that has a separate brand that is integral to its offering.” Outperform. $615.

Walter Piecyk: BTIG. Beats me. “Investors pay attention to changes in patterns. Some are stark like a return to EPS growth while others are subtle like the inflection point when accelerating ARPU growth begins to decelerate. A $3 billion purchase by Apple following decades of acquisitions that haven’t topped $400 million is a change in pattern that will justifiably generate some questions for management and perhaps the Board of Directors to address. Let me tone down that hyperbole a bit. $3 billion is less than 2% of the company’s cash and less than 10% its annual free cash flow. So in the grand scheme of things, its not a deal that is going to have a material impact on results but the c hange in pattern is what drives the questions.” $600.

James McQuivey: Forrester. “Given Apple’s historical tight-fistedness with the contents of its huge treasure chest, it wouldn’t be surprising if the company backed away, especially after last night’s trial balloon (if it was such) sputtered so badly. But let’s consider this fact: Apple is not a stupid company. Sure, Apple can make mistakes (Apple Ping, anyone?) but when it trips over itself, it usually does so on the way up a hill worth climbing. Which leads me to this flight of fancy: What if, in buying Beats, Apple knows something that we do not, Apple sees something that we do not? If true, what could it be?”

Where does Apple deal leave Beats’ rivals?

FORTUNE — Apple’s AAPL potential purchase of Beats Electronics — the headphone and speaker manufacturer and music streaming service founded by hip-hop legend Dr. Dre and music producer Jimmy Iovine — could spell trouble for some of Beats’ rivals.

Other headphone manufacturers, such as Skullcandy SKUL and Harman HAR, will likely be affected “very little in the short-term,” said Aram Sinnreich, an assistant professor at Rutgers University who writes about music, technology, and media.

However, the future might not look quite so rosy for other streaming services, such as Spotify and Pandora P.

“They’re not making money,” Sinnreich said. “But Apple can afford to lose money on music the way they always have.”

For years, Apple’s music business has been based on purchased, downloaded songs. Now, though, consumers are far more interested in streaming services of the type Apple would get in a Beats acquisition.

“Apple was kind of artificially buoyed for the last decade by having created this download market,” said Sinnreich. “The future is clearly in streaming.”

Despite the streaming market being “Apple’s market to lose,” Sinnreich said, they’ve not been able to capitalize on it. iTunes radio, launched in 2013, has not been a roaring success.

For some, the question is why Apple went after Beats in particular. On CNBC Friday, Jim Cramer asked why Apple didn’t spend a bit more money to acquire Pandora. Sinnreich said Pandora was, frankly, “a little long in the tooth.”

Pandora can’t offer on-demand streaming, or algorithm-determined playlists based on tastes. Consumers “want to be able to order the content that they’re interested in,” Sinnreich said.

Sinnreich also noted that the battle for the streaming market really boils down to two experiences: the one in the car, and the one in the living room. In the car, music is the primary content, while in the living room it is on-demand video. If he were Spotify, Sinnreich said, he’d diversify his offerings, bringing the fight into the living room to compete with services such as Netflix, Hulu Plus and Amazon Prime. This would be an especially good move if the rumors of Netflix getting into the streaming music game turn out to be true.

“I think it makes sense for streaming services to battle with Netflix on their own terms,” he said.

Right now, music services like Spotify are hoping to eke out a margin on streaming music, something Sinnreich just doesn’t see happening.